Financing costs for OANDA Australia
This FAQ has financing cost information for FX CFDs, index CFDs, cryptocurrency CFDs, commodity CFDs and bond CFDs.
How does OANDA Australia Ltd calculate funding rates?
Asset class | Funding rates (Long/buy positions) | Funding rates (short/sell positions) |
---|---|---|
FX and metal CFDs (excluding copper, platinum and palladium) | Rates are based on a blend of underlying liquidity providers’ tom-next SWAP rates, adjusted by the instrument specific admin fee.On our financing costs webpage , you can select the instrument that you wish to trade and it will calculate both the annualised funding rate (including the specific admin fee) and anticipated daily financing cost based on prevailing rates. Additionally you will also see historic funding rates. | Rates are based on a blend of underlying liquidity providers’ tom-next SWAP rates, adjusted by the instrument specific admin fee.On our financing costs webpage , you can select the instrument that you wish to trade and it will calculate both the annualised funding rate (including the specific admin fee) and anticipated daily financing cost based on prevailing rates. Additionally you will also see historic funding rates. |
Index CFDs | Rates are admin fee of 2.5% plus relevant* alternative reference rate . In the event this results in a negative rate, a charge will be levied to your account.* Please contact us via OANDA Chat if you require details of the alternative reference rate for each market. Otherwise, visit our financing costs webpage for more details. On our financing costs webpage , you can select the instrument that you wish to trade and it will calculate both the annualised funding rate (including the admin fee) and anticipated daily financing cost based on prevailing rates. Additionally you will also see historic funding rates. | When the relevant* alternative reference rate is greater than our 2.5% admin fee, the rate used will be the difference between the two. This is represented by a positive rate, and therefore a credit.When the relevant* alternative reference rate is lower than our 2.5% admin fee, the rate used will be the difference between the two. This is represented by a negative rate, and therefore a charge.* Please contact us via OANDA Chat if you require details of the alternative reference rate for each market. Otherwise, visit our financing costs webpage for more details.On our financing costs webpage , you can select the instrument that you wish to trade and it will calculate both the annualised funding rate (including the admin fee) and anticipated daily financing cost based on prevailing rates. Additionally you will also see historic funding rates. |
Cryptocurrency CFDs | The funding rate for long positions is -25% - SOFR | The funding rate for short positions is -25% + SOFR |
Commodity CFDs and bond CFDs | Financing is calculated by applying an admin fee of 2.5%, which is deducted from the basis rate (for short positions) or added to the basis rate (for long positions). The basis rate is calculated by determining the percentage difference between the near-expiration futures contract and the next futures contract. More information can be found in ' Examples of financing costs for commodity CFDs and bond CFDs (illustrative purposes only) 'Financing rates for commodity CFDs and bond CFDs are calculated second-by-second. | Financing is calculated by applying an admin fee of 2.5%, which is deducted from the basis rate (for short positions) or added to the basis rate (for long positions). The basis rate is calculated by determining the percentage difference between the near-expiration futures contract and the next futures contract. More information can be found in ' Examples of financing costs for commodity CFDs and bond CFDs (illustrative purposes only) 'Financing rates for commodity CFDs and bond CFDs are calculated second-by-second. |
Index | Alternative reference rate |
---|---|
Australia 200 | AONIA |
China A50 | SOFR |
China H Shares |
HONIA |
Germany 30 |
ESTR |
Europe 50 |
ESTR |
France 40 |
ESTR |
Hong Kong 33 |
HONIA |
India 50 |
SOFR |
Japan 225 (USD) |
SOFR |
Japan 225 (JPY) |
TONA |
US Nas 100 |
SOFR |
Netherlands 25 |
ESTR |
Singapore 30 |
SORA |
Spain 35 |
ESTR |
Switzerland 20 |
SARON |
US SPX 500 |
SOFR |
Taiwan Index |
SOFR |
UK 100 |
SONIA |
US Russell 2000 |
SOFR |
US Wall St 30 |
SOFR |
How are financing costs affected by settlements in the underlying asset and impact of weekends and public holidays?
Different asset classes settle on different days.
FX and metal (except copper, platinum and palladium) trades typically settle on a T+2 basis, which effectively means that weekend financing is usually applied two days earlier on Wednesdays (tripling the usual daily value), although this timeline is similarly impacted by public holidays. Indices typically factor in weekend financing on a Friday (tripling the usual daily value), although this timeline is also similarly impacted by Public Holidays.
Accordingly, the actual funding rate on any given day may reflect more than one days costs, as there are no actual financing charges or credit adjustment entries made to your account over the weekend.
Examples of financing costs for FX CFDs (illustrative purposes only)
Assumptions:
Instrument | Daily long funding rate | Daily short funding rate |
---|---|---|
EUR/USD | -3.00% | +1.60% |
Example 1
Client opens a long 100,000 EUR/USD trade at 8:30am ET Wednesday and closes it at 3:30pm ET Wednesday.
Result: there are no financing costs for this client, as no open position held at 5pm ET end of day.
Example 2
Client is long 130,000 EUR/USD which remains open after 5pm ET Tuesday.
The daily financing cost = 130,000 x -3.00% x 1/365 = -10.68 EUR
Result: a financing charge of 10.68 EUR, converted to the client’s account home currency, will be levied on their account. This will be charged every day the position is held beyond 5pm ET (see also Example 3 below for treatment of positions held after Wednesday 5pm ET).
Example 3
Client is short 130,000 EUR/USD trade which remains open after 5pm ET Wednesday.
The daily financing for this position is 130,000 x 1.6% x 1/365 = 5.70 EUR.
However, as this position is held past 5pm ET Wednesday (see FAQ “How are financing costs affected by settlements in the underlying asset and impact of weekends and public holidays?”), the total credit received is equal to 17.10 EUR (130,000 x (1.6% / 365) x 3).
Result: a financing credit of 17.10 EUR, converted to the client’s account home currency, will be applied to the account.
Examples of financing costs for index CFDs (illustrative purposes only)
Assumptions:
Instrument | Long funding rate (annual) | Short funding rate (annual) | Long/buy price (ET 5pm) | Short/sell price (ET 5pm) |
---|---|---|---|---|
US SPX 500 | Alternative reference rate + an admin fee of 2.5%. For example: 1.50% + 2.50% = 4.00% | Alternative reference rate – 2.5% admin fee. For example: 4.50% - 2.50% = 2.00% | 3040.50 | 3040.42 |
Example 1
Client is long 1 unit of US SPX 500 (S&P 500) trade that remains open after 5pm ET Tuesday.
Financing cost = (1 x 3040.50) x (4.00% x 1/365) = 0.33 USD
Result: a financing charge of 0.33 USD, converted to the client’s account home currency, will be levied to their account. This will be charged every day the position remains open after 5pm ET (see also Example 2 below for treatment of positions held after Friday 5pm ET).
Example 2
Client is short 10 units of US SPX 500 trade that remains open after 5pm ET Friday.
The daily financing for this position is (10 x 3040.42) x (2.00% x 1/365) = 1.66 USD.
However, as this position is held past 5pm ET Friday (see FAQ “How are financing costs affected by settlements in the underlying asset and impact of weekends and public holidays?”), the total credit received is equal to 5.00 USD ((10 x 3040.42) x (2.00% / 365) x 3).
Result: a financing credit of 5.00 USD, converted to the client’s account home currency, will be applied to their account.
Examples of financing costs for cryptocurrency CFDs (illustrative purposes only)
Assumptions:
Instrument | Long funding rate | Short funding rate |
---|---|---|
Bitcoin CFD | -25% - SOFR. For example, -25% - 0.05% = - 25.05% | -25%+ SOFR. For example, -25% + 0.05% = -24.95% |
Example 1
Client is long 10 bitcoin @ $7050 trade that remains open after 5pm ET Tuesday.
Financing cost = 10 x 25.05% x (1 / 365) = 0.0068630137 BTC
Result: a financing charge of 0.0068630137 BTC converted to the client’s home currency will be applied. This will be charged every day the position remains open after 5pm ET.
Example 2
Client is short 1 bitcoin @ $7000 trade open at 5pm ET Monday.
Financing cost = 1 x 24.95% x (1 / 365) = 0.0006835616 BTC
Result: A financing charge of 0.0006835616 BTC converted to the client’s home currency will be applied. This will be charged every day the position remains open after 5pm ET.
Examples of financing costs for commodity CFDs and bond CFDs (illustrative purposes only)
The prices of OANDA’s commodity CFDs (including copper, platinum and palladium) and bond CFDs are based on underlying active futures contracts. When an underlying futures contract is near expiry, OANDA calculates the basis rate, which represents the difference in price between the expiring futures contract and the next futures contract. From that point forward, the OANDA CFD price is calculated as the present value of the price of the next futures contract, using the basis rate for the present value calculation. The present value is calculated continuously, second-by-second.
When the basis rate is positive, the CFD price will tend to move upwards towards the contract price. When the basis rate is negative, the CFD price will tend to move downwards towards the contract price.
Financing cost = position size x funding rate x trade duration (in days) / 365 x conversion rate to account currency
Financing charges on commodity CFDs and bond CFDs will be calculated on a continuous second-by-second basis. These charges or credits are applied at the close of a trade. Additionally, if you have an open commodity CFD or bond CFD position on your account at the end of each day (5pm ET), including weekends, it will be subject to either a ‘financing charge’ or ‘financing credit’ to reflect the cost of funding your position (in relation to the margin utilised).
OANDA charges financing on commodity CFDs (including copper, platinum and palladium) and bond CFDs using the basis rate plus an admin fee. The basis rate portion of the financing amount is intended to offset the price movements caused by the present value calculation.
For long positions clients will be debited the basis rate plus a 2.5% admin fee. For short positions, clients will be credited the basis rate minus a 2.5% admin fee.
Asset | Long positions | Short positions |
---|---|---|
Commodity CFDs and bond CFDs | Basis rate + 2.5% admin fee | Basis rate – 2.5% admin fee |
Example 1
The Brent Crude Oil CFD has a basis rate of +5.00%, indicating that the CFD price is likely to move upwards toward the next contract price.
Client has a USD account, and the conversion rate from 1 Brent Crude Oil CFD to USD is 63.00 USD
Client has a 100-unit long position of Brent Crude Oil, which was opened between 3:00am and 3:00pm ET.
Financing amount = position size x funding rate x trade duration (in days) / 365 x conversion rate
Position size = 100Funding rate = (5.00% + 2.50%) = 7.50%Trade duration (in days) = 12 hours = 0.5 days
Financing amount = 100 x (5.00% + 2.50%) x ((0.5 / 365) x 63.00) = 0.65 USD
Result: a financing debit of 0.65 USD will be applied to the client's account. In this example, the debit offsets the trading profit that results from the price tending upward.
Example 2
The Brent Crude Oil CFD has a basis rate of +5.00%, indicating that the CFD price will tend upwards toward the next contract price.
Client has a USD account, and the conversion rate from 1 Brent Crude Oil CFD to USD is 63.00 USD
Client has a 400-unit short position of Brent Crude Oil, which was opened between 9:00am ET and 3:00pm ET.
Financing amount = position size x funding rate x trade duration (in days) / 365 x conversion rate
Position size = 400Funding rate = (5.00% - 2.50%) = 2.50%Trade duration (in days) = 6 hours = 0.25 days
Financing amount = 400 x (5.00% - 2.50%) x ((0.25 / 365) x 63.00) = 0.43 USD
Result: a financing credit of 0.43 USD will be applied to the client account. In this example, the credit offsets the trading loss that results from the price tending upward.
Example 3
The Natural Gas CFD has a basis rate of -20.00%, indicating that the CFD price will tend downwards toward the next contract price.
Client has a EUR account, and the conversion rate from Natural Gas CFD to EUR is 2.50 EUR.
Client has a 100,000-unit long position of Natural Gas, which was opened between 2:00am ET and 2:00pm ET.
Financing amount = position size x funding rate x trade duration (in days) / 365 x conversion rate
Position size = 100,000Funding rate = (-20.00% + 2.50%) = -17.50%Trade duration (in days) = 12 hours = 0.50 days
Financing amount = 100,000 x (-20.00% + 2.50%) x ((0.5 / 365) x 2.50) = -59.93 EUR
Result: since the resulting amount to be debited is negative, a financing credit of 59.93 EUR will be applied to the client account. In this example, the credit offsets the trading loss that results from the price tending downward.
If you have an open position on your account at the end of each trading day (5pm ET), the position is considered to be held overnight and subject to either a ‘financing charge’ or ‘financing credit’ to reflect the cost of funding your position (in relation to the margin utilised). OANDA’s financing rate is determined by applying an admin fee to the applicable alternative reference rate for each product.
The financing amount is calculated on a per position basis and may be a payable (debit) or a receivable (credit) and is also dependent on whether the position is a buy (long) position or a sell (short) position. More information on this can be found in the FAQ “How doesOANDA Australia calculate funding rates?”
For FX and metal (except copper, platinum and palladium) positions:
Daily financing charge or credit = size of position x applicable funding rate x days/365
For index positions:
Daily financing charge or credit = value of position* x applicable funding rate x days/365
*where value of position = size of position x price at the end of trading day (5pm ET)
For cryptocurrency positions:
Daily financing charge = (position size x funding rate) x 1/365
Funding rate for long positions = - 25% - SOFR
Funding rate for short positions = - 25% + SOFR
Funding rates (sometimes called the "swap rate" for FX products) vary from instrument to instrument and may change on a daily basis.
For long positions, generally you will be charged the financing rate. This is because OANDA’s admin fee is added to the alternative reference rate. For example, assume the alternative reference rate is 2%. Once OANDA’s admin fee is added to that 2% alternative reference rate, the funding rate would be a total of 4.5%. Note that this 4.5% is an annual rate, so to calculate the daily financing rate, you would need to divide it by 365 (as per the calculations above).
For short positions, generally you will receive the financing rate as a credit. However, if the funding rate is negative (alternative reference rate less admin fee results in a negative value), you will be charged that resultant rate. For example, assume the alternative reference rate is 2%. Once the admin fee is applied, the funding rate would be -0.5%. In this case, your position would be subject to a 0.5% charge, divided by 365 (as per the calculations above) to get the daily equivalent rate.
The daily financing charge or credit will be added or deducted to/from your account each day and will be visible in your transaction history accessible via your account portal.
Still have questions? Chat with an agent.